The Department for Transport has been warned that Northern Powerhouse Rail remains at risk of repeating the mistakes seen on HS2, with major questions still unresolved over scope, cost, governance and delivery.
A new report from the Public Accounts Committee says it is not confident that the Department for Transport has fully embedded lessons from previous rail programmes, despite Northern Powerhouse Rail having been under discussion for more than 12 years.
The committee said the programme remains at an early stage, with key decisions still outstanding on journey times, service frequency, capacity, the exact route of new infrastructure, who will build it, and how wider regeneration benefits will be prioritised across the North.
Northern Powerhouse Rail is intended to improve east-west connectivity between northern cities, supporting productivity, labour mobility and wider economic growth. However, the PAC warned that there is still “considerable uncertainty” over how the Government’s ambitions will translate into practical benefits for passengers, businesses and local economies.
The report raises particular concern over the programme’s £45bn funding cap, which was set before the full scheme had been designed, scoped or costed. The committee said it was unclear how HM Treasury arrived at the figure and warned that the final phase of the programme, which is needed to deliver the full connectivity benefits, could be at risk if early estimates prove unrealistic.
The PAC said the Department has “no convincing plan” for managing spending within the cap or for deciding which benefits would be prioritised if cost pressures emerge. It also warned that local areas less able to raise additional funding or attract private investment could lose out.
The committee has called on the Department to set out how much funding will be allocated to each phase, how local government will be supported to raise additional funds, and what would be descoped if costs rise.
Governance is another major area of concern. The PAC said the Department has not yet put formal arrangements in place for joint decision-making with other central government departments, despite the programme’s dependence on wider economic, housing and regeneration policy.
It also questioned whether arrangements for working with local government are strong enough to handle difficult trade-offs between different areas. The report warns that enhanced local benefits in one area, such as Manchester, could come at the expense of another unless additional local funding is secured.
The involvement of HS2 Ltd in developing plans for the Liverpool to Manchester section has also attracted scrutiny. The committee said HS2 Ltd’s record on cost estimation heightens the risk that early estimates for Northern Powerhouse Rail may prove unrealistic.
Clive Betts MP, Deputy Chair of the Public Accounts Committee, said the Government’s growth strategy showed there was still an appetite to deliver the transport infrastructure the North needs, but warned that “the spectre of HS2 hangs over Northern Powerhouse Rail”.
He said the committee had heard “troubling echoes” of the loose governance seen in the early stages of HS2, adding that the project remains “almost impressionistic” more than a decade after it was first announced.
The PAC has also called for clarity on how Northern Powerhouse Rail will integrate with wider national and local transport priorities. It noted that the West Coast Main Line into Manchester is expected to reach capacity in the 2030s, while the relevant phase of Northern Powerhouse Rail is not expected to be complete until the mid-2040s.
The committee said the Department must explain how it plans to bridge that gap and ensure local transport networks across the route are properly integrated with the programme.
For the rail supply chain, the report underlines both the scale of the opportunity and the level of uncertainty still surrounding the scheme. Northern Powerhouse Rail could provide decades of work across design, engineering, civils, systems, rolling stock, stations and integration. But the PAC’s findings suggest that confidence will depend on greater clarity over delivery structure, funding certainty and programme governance.
The committee has made a series of recommendations, including a requirement for the Department to explain within six months whether Northern Powerhouse Rail should be treated as a mega-project, how lessons from HS2 and other rail schemes are being embedded, and how recent planning reforms could help reduce costs.
It has also asked HM Treasury to explain how the £45bn cap was determined before the programme was fully designed and costed.
The report concludes that while Northern Powerhouse Rail remains central to improving connectivity and economic performance across the North, the Government must now move from ambition to a clear, deliverable plan.
For an industry still dealing with the legacy of stop-start investment, escalating costs and uncertainty around major programmes, the message from the PAC is direct: Northern Powerhouse Rail may be essential, but it will not succeed on aspiration alone.
